Who’s running my team: Texas Rangers

One of a series of articles looking at the front office structure of each major league team. Today, we take a closer look at the Texas Rangers.

Texas Rangers

• Owners: Ray Davis and Robert Simpson
• President of Baseball Operations and General Manager: Jon Daniels

The Davis-Simpson group purchased the Texas Rangers at auction in 2010 after former owner Tom Hicks surrendered the team as part of a bankruptcy settlement. They inherited Daniels, who Hicks had hired following the 2005 season, and have never tampered with his operational control of the team.

In fact, they have renewed Daniels’ contract twice, in 2014 and again in 2018.

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That makes Daniels the Rangers’ shaping force. A Cornell economics grad, he dabbled briefly in business development before catching on with the Rockies as an intern.

His rise from there was meteoric. Named an assistant in the Rangers’ operations department in 2002, he was promoted to director of the department in 2003, and then to assistant GM the following summer.

When his boss, John Hart, retired, Daniels applied for the GM job and was hired. He was 28 years old, and the youngest general manager in baseball history.

Across the ensuing 14 seasons, Daniels has established a reputation as a confirmed long-term planner. As much as any other team chief executive, he is willing to sacrifice the present for the future. This is made crystal clear by the assessment of the net impact of his personnel moves based on Wins Above Average*.

Looking strictly at the short-term impact of those moves – the impact accruing during the season in which the transaction took place – amounted to -30.4 games. Only six of those 14 short-term impacts have been positive, none more than 4.1 games to the good. In 2013, Daniels’ Rangers went 91-72 but fell one game short of post-season play.

In reaction, Daniels that winter and the following spring made moves involving 57 players. The net short-term impact of those 57 moves on Texas’ fortunes added up to -18.7 games, the Rangers plummeting 24 games in the AL West standings.

But when you extend the value of those moves beyond the first season, Daniels begins to look a lot better. The net impact of the long-term impact of Daniels on the Rangers – that is, the impact of moves in years subsequent to the year in which the move was made – adds up to +51.3 games. During five different seasons, the long-term impact of Daniels’ moves has exceeded +9.0 games, peaking at +20.6 games in 2012.

The Rangers are a definitional mid-market team. Forbes puts their value at $1.65 billion, a number than ranks 13th among the 30 teams. The franchise produced $324 million in revenues in 2019, also 13th.

That is, however, a nice upgrade from the $180 million in revenues the Rangers reported in 2010, a total that ranked only 17th.

The Texas Rangers are moving into a new stadium in 2020, not that the old one did them any fiscal harm. Texas derived $331 million in value, the game’s 10 highest total, from Globe Life Park in 2019.

Rangers fans have been reliable, at least 2 million of them showing up annually – with just two exceptions — since 1989. The Ranger organization does not abuse that fan base, extracting just $32 per fan in 2019. Only the Mets and Marlins require less of their fans.

Davis and Simpson have largely been hands-off owners. Both men came to their ownership of the Rangers following careers in the energy business, albeit with separate companies.

One thing Daniels has not done is financially abuse the leash Davis and Simpson have given him. In 2019, the Ranger committed $136.4 million to player salaries, just 42 percent of their $136.4 million revenue. That’s materially unchanged from the 41 percent they spent on players a decade ago, and significantly below the approximately 52 percent level that is an informal industry benchmark.

That payroll will increase in 2020 to an estimated $160 million thanks in part to the trade that brought Corey Kluber and his $17.5 million salary over from Cleveland.

Curiously for a team that is not profligate with its payroll, the Texas Rangers have some recent experience with red ink. Between 2013 and 2016, in pursuit of division titles annually, Daniels oversaw three operating income deficits, in amounts ranging from $4.7 million to $8.7 million. They made up for it in 2019, collecting $39 million in pre-tax income.

Going forward, the Rangers’ challenge is to improve their presence in a market that is more beholden to non-baseball entities. They play in the nation’s fourth-largest metropolitan area, and by extension the largest featuring just one MLB team.  Yet they rank just 13th in value.

Why? The reason is in blue, and it plays each fall just a short distance from the team’s new stadium. The NFL’s Cowboys are the most valuable franchise in North American professional sports, at $5.5 billion, 3.5 times the Rangers’ value.

Davis, Simpson, Daniels and the team are never going to reverse that disparity favoring their neighborhood. They need to do what they can to ameliorate it to the extent it is possible to do so.

*This calculation is obtained by determining the net impact of player transactions on team performance for the season(s) in question. Wins Above Average is a zero-based offshoot of Wins Above Replacement; thus, the final figure suggests the degree of positive or negative movement in the standings attributable to front office moves.